EICC Strengthens Corporate Social Responsibility Strategy

As we move into the second half of the year, it's worthwhile to review two recent announcements from the Electronic Industry Citizenship Coalition (EICC), an organization dedicated to raising the social, environmental, and ethical standards of the electronics industry.

So far this year, the EICC has changed its code of conduct specifically targeting the practice of forced labor. In addition, the organization has partnered with the Carbon Disclosure Project (CDP) to increase the number of smaller electronic suppliers that will participate in the CDP's supply chain program that asks companies to disclose information on their efforts to reduce greenhouse gas (GHG) emissions and environmental risk, including water risk.

Dexter Galvin, head of the CDP's supply chain program, said the EICC's participation, which began in February, means that for the first time EICC members can engage the CDP supply chain program to drive greenhouse gas (GHG) emissions reporting further down the electronics supply chain.

"Essentially, the EICC will provide us with supplier lists and we, in turn, will write to those suppliers to ask them to start disclosing their data through our system," Galvin said.

Under the program, companies are required to answer a broad array of questions designed not only to gauge their GHG reduction efforts, but also to evaluate how a company's management structure addresses climate change issues.

"We don't only ask questions about a company's carbon dioxide accounting practices in their business, we also ask questions like: What sort of governance structure do they have in relation to climate change? Who ultimately takes responsibility for climate change in their business? Where does that person sit in that business? And, have they done a detailed risk assessment on how climate change will affect their business now and in the future?" Galvin said.

"Through this partnership with CDP, we aim to have more electronics suppliers reporting on greenhouse gas emissions than ever before, developing the strongest supply chain GHG emissions mapping of any industry, and help our members with their own supplier benchmarking and reporting so they can drive cost-effective GHG reductions," Robert Lederer, executive director, EICC said in a statement.

While the process of reporting and measuring carbon emissions helps companies in the electronics industry gain an understanding of the changes they need to make to reduce GHG, Galvin said the data can identify collaborative opportunities that electronic suppliers along with their partners can take advantage of as they work together on GHG emissions reduction projects.

The EICC is comprised of 107 electronics companies, including Apple, Dell, IBM, Intel, Foxconn Technology Group, Analog Devices, and Texas Instruments. The total combined revenue of EICC's members is approximately $3 trillion, and companies employ more than 5.5 million people worldwide.

With regard to employment practices around the globe, the organization has focused this year on implementing steps to eliminate forced labor. The EICC announced that beginning April 1st, changes to its code of conduct would take effect. During an interview with Lederer to discuss these changes, he outlined why the new provisions in the code of conduct are significant. The code changes include:

The code now prohibits the holding of passports and other key worker documents. Lederer, said there have been cases where companies take passports away from their foreign workers as a way to reinforce forced labor practices. There have also been instances where companies restrict workers from leaving the factory campus where employees live and work.

Eliminating excessive fees. On this issue, the code of conduct now states that: "Workers shall not be required to pay employers' or agents' recruitment fees or other related fees for their employment. If any such fees are found to have been paid by workers, such fees shall be repaid to the worker." Lederer said the EICC made the decision that workers should not have to pay to secure a job. These fees often include recruitment fees, interview fees, transportation fees and passport fees. "What we were finding in some of the industry surveys is that employees would be indebted by the time they got to the job and they would have to work three months or sometime a year to pay off their debts," Lederer said.

The code requires companies to issue contracts in the worker's native language, before they depart from their country of origin. "What we found is that many employees did not understand the work contract and the work environment that they were getting into," Lederer said. "Our code now says that workers have to have a signed contract written in their native language and signed in the sending country before they leave for the job."

To make sure the code of conduct is being followed, the organization recently hired their first full-time employee in Asia, who will oversee the audit program in China and Malaysia. With the help of nine international audit firms, the EICC conducts more than 600 audits a year. The vast majority of these audits occur in China.

Additionally, EICC members conduct between 4,000 to 5,000 risk assessments annually in factories around the world.

"If there is a challenge to the EICC it's to go even further to what would be considered tier's 3, 4, 5 – pick a number – we want to reach a company making titanium screws for a phone," Lederer said. "We require our members to push smaller companies to conduct risk assessments on their facilities. There are challenges, but our reach throughout the supply chain is huge primarily because of who our members are."

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